The Netherlands Nukes Its Economy! The Truth Behind the 36% Unrealized Gains Tax, NYC Tax Hike Madness: Why Mamdani's “Freeze the Rent” Backfired on Day One, World War III? U.S. vs Iran, Russia & China – What You’re Not Being Told | Weekly Recap

Summary

Impact Theory with Tom Bilyeu – Weekly Recap Episode (February 22, 2026)

The Netherlands Nukes Its Economy! Unrealized Gains Tax, NYC’s Tax Hike, and World War III Tensions

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Episode Overview

In this high-energy weekly recap, host Tom Bilyeu (with regular contributor Drew) critically breaks down three major headline issues: the controversial Dutch 36% unrealized gains tax, New York City’s property tax hike backlash, and escalating U.S.-Iran tensions with the specter of World War III. The episode aims to cut through hype and controversy, focusing on the fundamental realities and policy consequences — with Tom’s trademark blend of layman clarity and sharp critique.

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Key Topics & Insights

1. The Netherlands’ 36% Unrealized Gains Tax

Segment: 01:27 – 09:50

Background and Explanation

• The Dutch government is poised to pass a 36% tax on unrealized capital gains (i.e., paper profits not yet “cashed out”), a move Tom calls an act of "economic ignorance" that could "nuke their economy" (01:36).
• This is part of their broader "box 3" wealth tax system. Real estate is treated more rationally—only taxed on realized gains—but other assets, including startups and personal investments, face the new rule unless falling under narrow exemptions.
• Key specifics:
  • Startups have a temporary exemption if the company’s under 5 years old and <€30M in revenue. If crossed, investors become liable for accumulated unrealized gains.
  • Losses can be carried forward indefinitely.
  • The old tax-free capital threshold becomes a tax-free income threshold of €1,800.

“Unrealized gains is just another word for potential gains. Maybe gains, but not actual. … To pay that tax, you'd usually have to sell the asset—which defies reason, as you didn't actually get the money!”
— Tom (03:33)

Illustrated Example and Critique

• Drew runs through a scenario: a €50k “gain” on paper results in a €16k tax bill, even if the underlying value drops before taxes are due (06:18).
  • If the asset’s value falls, you could end up with a net loss after paying taxes on gains you never realized.

“You would have to sell €16,000 in shares to pay your tax bill, and end up with less than you started. That’s why unrealized gains is a little bit weird.”
— Drew (06:26)

• Tom laments the chilling effect: startups dependent on equity investment will be discouraged if investors face surprise tax bills on shares they can’t easily sell.

Policy Suggestions

• Tom supports a much simpler, flat tax (“no loopholes, no confusion”) as a more effective, fairness-based approach (09:09).

“Do one flat tax on everybody. … No loophole for you.”
— Tom (09:16)

2. New York City’s Tax Hike & “Freeze the Rent” Backfire

Segment: 10:50 – 25:21

Political Irony

• Newly elected NYC democratic socialist Zoran Mamdani, who campaigned on “freeze the rent,” quickly pivots to proposing a 9.5% property tax hike to plug a budget gap—affecting 3 million homes—just 47 days in office (10:53).
• Tom lays out the arithmetic: NYC’s budget ballooned from $36.5B (2000) to $127B (2026) while the population grew by only 6.5%. Spending per capita tripled, but quality of life metrics, safety, and educational outcomes have sharply declined.

“They tripled the spending and everything got worse. … Only 12% think the city spends its money wisely.”
— Tom (12:43–13:00)

• The tax increase will be passed on as higher rents in non-stabilized units (56% of apartments). In stabilized units, landlords likely will cut maintenance or face foreclosure.
• The exodus of the wealthy—the top 1% pay 40% of NYC’s income tax—undermines the premise of funding expanded services by taxing ‘the rich.’ Instead, the burden shifts to the middle class.

Memorable Moment

“Margaret Thatcher said it best: the problem with socialism is that you eventually run out of other people's money.”
— Tom (17:45)

Fundamental Problem: Spending, Not Revenue

• Tom argues: NYC (and many governments) have a spending problem, not a revenue problem, pointing to pensions, contracts, and asylum-seeker expenses.
  • Drew notes hard choices: cutting pensions/healthcare is politically toxic but arithmetically necessary (19:05).
  • Tom: you can’t make everything free—if you want “free” programs, openly trade off spending somewhere else.

Notable Quote

“There are physics to this stuff. … You may want to build against a theory, [but] that theory is going to make contact with reality at some point.”
— Tom (20:20)

3. The Risk of World War III: U.S., Iran, Russia & China

Segment: 25:52 – 37:16

Military Escalation

• Tom details the U.S. military build-up: dual aircraft carrier groups, destroyers, F-35s, Patriots, and more assembling around Iran, referencing Trump’s saber-rattling post and last June’s Operation Midnight Hammer.

• Iran, with public support from Russia and China (joint exercises, warships in the region), conducts live-fire drills and partially closes the Strait of Hormuz (which handles 20% of global oil).

“You have Russians, Chinese warships conducting joint exercises with Iran in those exact same waters. And all of this in a passage that is only 24 miles wide and carries one fifth of the entire planet's oil supply.”
— Tom (30:22)

• Both sides are sending signals, raising the odds of a dangerous miscalculation.
• Drew paraphrases Iran’s Supreme Leader’s warning:

  “The strongest military in the world may at times be struck so hard it cannot get up again.”
  — Khomeini, quoted by Tom (32:31)

Tom’s Take

• Tom is skeptical of immediate war but says “the presence changes the math.” The risk lies in cascading accidents or political incentives (e.g., distracting from scandals).
• The narrative may be more complex than headlines suggest, with behind-the-scenes intelligence and brinksmanship.

“We will do well to remember—the real story behind the scenes is going to be far more complicated…you need a mental map to not be yanked around by headlines.”
— Tom (35:54)

• Tom is dubious about 4chan predictions of Israeli tactical nuclear first-strikes, but notes how underlying tensions and secret operations complicate public understanding.

“Nothing has changed for Israel. … The first country to use nuclear weapons changes the board.”
— Tom (33:45)

Macro Reflection

• As the world fragments into multipolar power centers and nuclear weapons proliferate, “expect it to escalate,” unless deeper structural changes occur.

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Notable Quotes & Moments

• “Unrealized gains is just another word for potential gains. ... It's not real gains. You haven't made the money.”
  (Tom, 03:33)

• “They tripled the spending and everything got worse. ... Only 12% think the city spends its money wisely.”
  (Tom, 12:43–13:00)

• “Margaret Thatcher said it best ... eventually, you run out of other people's money.”
  (Tom, 17:45)

• “There are physics to this stuff ... That theory is going to make contact with reality at some point.”
  (Tom, 20:20)

• “You have Russians, Chinese warships conducting joint exercises with Iran in those exact same waters. And all of this in a passage only 24 miles wide and carries one fifth of the entire planet's oil supply.”
  (Tom, 30:22)

• “We will do well to remember—the real story behind the scenes is going to be far more complicated ... you need a mental map to not be yanked around by headlines.”
  (Tom, 35:54)

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Timestamps for Major Segments

• [01:27] Netherlands’ 36% unrealized gains tax: context and critique
• [06:12] Example of tax implications; impact on fairness and investor behavior
• [09:13] Simplifying tax policy
• [10:53] New York City's rent freeze and property tax hike, budget woes
• [12:43–13:00] NYC budget/spending vs. outcomes
• [17:45] The Margaret Thatcher quote
• [19:11] Discussion of hard spending cuts (pensions, healthcare)
• [20:20] Analogy of “physics” in economics
• [25:52] U.S. vs Iran (geopolitical escalation)
• [32:31] Iranian leader’s warning quote and discussion
• [35:54] “Don’t be fooled by headlines”—mapping reality

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Tone and Takeaway

Throughout the episode, Tom maintains his direct, no-nonsense tone, determined to strip away ideology and noise, urging listeners to “map the physics” (realities) behind both economic policy and geopolitical moves. Listeners leave with a skeptical lens, focused on incentives, arithmetic, and the dangers of headline-driven thinking—a toolkit for “seeing the world clearly.”

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For those yet to listen, this episode offers a lively but deeply critical guide to understanding the real-world impacts of new tax regimes, city budgets, and global power plays—cutting through memes and slogans with practical, sometimes uncomfortable, truths.

Transcript

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[Drew]

experience Sad day in the Netherlands the Dutch government is expected to pass a bill introducing a 36% tax on unrealized capital gains.

[Tom]

The Netherlands have basically decided to lay bare their own economic ignorance and nuke their economy in a single move by taxing unrealized gains. This was a big blow up that people had with my take on Kamala Harris and I'm telling you it is as big as I have made this out to be. And this is the Netherlands attempt at reforming what they call box 3. It's their wealth tax system. Different people fall into different types of boxes, but the proposed system introduces a capital growth tax where not only regular income like interest or dividends, rent, things like that are taxed annually, but also realized and unrealized changes in asset value or tax. So the proposed rate is a flat 36% on all taxable income within box three. The bill was submitted in May of 25 and it's targeted to take effect on January 1st of 28. Just map out what this will do. The problem is the people proposing this either don't understand the logistics or they understand the logistics and literally want to destroy their own economy. Unrealized gains is just another word for potential gains. Maybe gains, but not actual gains. If You've got gains that are taxable by this law. To have enough money to pay that actual tax, you would have to sell the thing, typically a company or something like that, in order to pay the tax. Now, there are important specifics to the proposal. I'll go through them because I want people to understand. I'm not saying what I'm saying because I'm confused. I'm saying what I'm saying because I'm looking at what they're doing, including all the caveats and the things that they're going to push aside. And this is still a catastrophe. So real estate treated differently. Cool. So you probably don't have to worry. Unlike other assets, real estate will not be taxed on unrealized gains. Property owners only have to pay tax on gains when the property is sold or transferred, as it should be, because that's a realized gain. That makes sense. Startups share exempt status from annual unrealized gains under certain conditions. So if someone holds holds a small share under it's under 5% in a qualifying startup, they're only taxed on dividends with capital gains taxed at sale, again, as it should be. Those are realized gains. Losses are deductible. Losses within box three can be carried forward indefinitely against future box three income. There's a tax free threshold. The current tax free capital threshold will be replaced by a tax free income threshold of €1,800. Now this is going to create real problems for companies with a certain type of investor. And this is what I want people to understand. The way that they define a startup becomes critical. It's a company making less than 30 million euro a year and it's a company that's less than five years old. Take Quest, the company that I built. We would have been in trouble. Not us, because we were the three of us that founded it, but our investors would have been because our investors owned more than 5% of the company and the company had gone screaming up in value. Now what do they do? They would obviously have to pressure us to take out a loan so that they could pay that back. They would have to take out a loan to pay that back or we would have to sell the company. All of which are terrible. So if you hold shares in a private company, you're not likely going to be able to sell those freely. Okay, so it's not like a public company where you can just sell a piece of it. There are usually shareholder agreements, transfer restrictions, right of first refusal clauses, and simply no liquid market for the shares. I won't say no liquid market, but they're not like they are in public markets. Not by a lot, but one once the startup exemption expires, like if you cross that 30 million euro threshold, for instance, you now owe the 36% on potentially years of accumulated paper gains all in one hit. So all of the options are going to be bad. Like I said, you can take out a loan assuming that the bank will even lend against an illiquid private company share. So it's not even a guarantee that you're going to be able to do this. Most banks probably aren't going to do that because like I said, this is potential value. Anything could happen between here and there and then you're paying interest on the borrowed money to cover a tax bill on income you haven't received. Not only have you not received it, you may never receive it. This is the one where I'm like, if I could just get people to understand this, this would all be very simple. It's not real gains. You haven't made the money. If you're worried that people hide behind not real gains so they'll gamble to avoid paying tax off in the future, great. There are other ways that you can tax them to feel like, ah, cool, like we stop people from hiding or doing tax evasion or whatever. This is how you begin to erode your economy because people aren't going to make long term plans. Why would you ever invest in more than 5% of a company when you know that you could find yourself in this position? When Kamala Harris made that proposal here, I had the exact same reaction.

[Drew]

Let's say January 1, 2028, you have €50. The value as of January 1, 2029 is €100,000.

[Tom]

Yep.

[Drew]

Also on paper, your gain is 50,000. That's an unrealized gain. You didn't sell anything. It's been in the equity market the exact same time. You didn't do anything. You just went from 50 to 100. Boom. You quote, unquote, made 50,000 in unrealized gains. Now you're married, you get the exception. 3,600. We do all the math. You have 4,640 6,400 as your taxable amount. That's the exception, minus your unrealized gains. Now, based on this tax bill, 36%. You would owe $16,000 in your tax bill from this unrealized gains. But now let's say the bill is due in May and the market falls. Now your new value is 60k. So your portfolio, your portfolio is no longer worth that 100k. Just like Bitcoin is going down, as we've seen it, it went from 125 to 60,000. That's a 50% reduction. You were at 50, you went to 100, now you' back at 60. Your tax bill is still 16,000. So you would have to sell 16,000 of that of in shares in order to pay your tax bill and you would end up with 43,296. So instead of appreciating, you are now going negative because you had to pay a tax bill on a gain that you never actually realized. So this is why unrealized gains is a little bit weird. What I propose is what everybody is saying is that, well, okay, let's look at Elon. He's worth a billion dollars on unrealized gains. And, and he just takes loans from that and he doesn't get paid and he doesn't pay taxes. So why don't we tax the loans against stocks or let's tax the money that actually hits his account. But taxing the phantom money in the market is where you're going to end up penalizing average investors as opposed to getting the big guys that you guys think this tax will do.

[Tom]

You would have to put very thoughtful restrictions around that. Otherwise that guy, you get essentially double interest payments on that or double tax, however you want to look at it. But yes, it's going to completely change people's behavior and not in a way that grows, grows companies in a way that slows companies or stops the incentive to start a company in the first place. Remember, most companies, most big companies, I should say most companies that get big, they don't start off bootstrapped. They start off raising capital. And if you're raising capital, this is going to completely change that. And so the current world that you're living in is brought to you by the ability to aggregate capital. All the big beautiful buildings that you see, all the safety that you enjoy, all of that is a result of the ability to aggregate capital. Now if you really want to pressure people to the right thing, you would press them on making money sound so that you can't print money and steal it from the poor and working class. So you could stop the K shaped economy so you could dramatically reduce the right thing that people should be focusing on, which is the intolerable level of inequality as separated from normal desirable inequality. Intolerable inequality is a category unto itself which we are currently in, that we should be going after with everything we have. But that has to do with central banks. That has to do with money printing bank bailouts, things like that. It does not have to do with making sure that we gobble up every tax dollar that we can. Which of course, the higher you press tax rates, Laffer's curve shows you that your actual recouped tax dollars go down.

[Drew]

How should we actually fix the tax policy?

[Tom]

Do one flat tax on everybody no matter what.

[Drew]

So everybody pays 15%. Like what do you mean?

[Tom]

The tax code is literally everybody pays 32%. Whatever.

[Drew]

Okay? So period.

[Tom]

There's no loophole for you.

[Drew]

If you are in resident of America, you pay 32% of whatever you make.

[Tom]

You made $52. I mean you probably put some sort of very, very, very low minimum threshold. Let's say you put your minimum threshold at like 25 grand and cool. Anybody above that number, you're going to pay whatever percent of your tax just is what it is. Taking a short break, but there's more impact theory after. Stay tuned.

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[Tom]

Thanks for staying tuned. Now let's get back to it.

[Drew]

Mamdani had a rude awakening over in nyc.

[Tom]

Okay, on. On this one, I'm really trying to just keep my sobriety because boy do we walk up close to a litany of I told you so's here. But it took Zoran Mamdani exactly 47 days to propose a tax increase on the very people he promised to protect. 47 days from freeze the rent as a chant to a 9.5% property tax hike on 3 million homes. Now, to understand just how absurd this is, you've got to understand the specifics. New York City's budget in the year 2000. Okay, so just 26 years ago, in the year 2000, New York City's budget was $36.5 billion. Okay, it's a lot of money, but understandable. That covered all 8 million people living in the city at the time. That's roughly $4,500 per person. Yesterday, Mamdani unveiled a $127 billion preliminary budget for all of the people that now live in New York. And how many extra people have they added in the last 26 years? Did it go up by the same roughly 3.5x that the budget went up by? No. There are currently roughly 8.5 million people living in New York. That's an increase of roughly half a million people, which is a population growth of only about 6.5%. The budget, however, grew by a staggering 248%. That is a ludicrous $14,941 per person. Spending per person didn't keep pace with inflation. It tripled. So everything must be three times better, right? In 2017, 51% of New Yorkers rated their quality of life as excellent or good. Today that number is 34%. Only 12% think the city spends its money wisely. Only 22% feel safe on the subway at night. And felony assaults hit a 24 year high. In 2024. The city spends over $40,000 per student just on education, which is the highest in the country. And yet more than half of New York City kids can't read at grade level. Their own school's chancellor admitted that that's true. They tripled the spending and everything got worse. To put this in perspective, Houston only spends $2,900 per person versus 14,000 and change in New York and Houston. They don't have state income tax, nor do they have city income tax. And their population is growing. New York spends five times more. And 66% of residents say life is getting worse. So where did the extra money go? Pension Costs are up 115%. Outsourced contracts ballooned by $7 billion. A brand new 5 billion dollar asylum seeker expense materialized out of thin air. It literally didn't exist just three years ago. Social services spending has doubled. The city employs over 300,000 people, and the debt keeps ballooning. Now, none of that is Mamdani's fault. Let's be very clear. He wasn't in office. But it does show that more money is not going to solve the problem. But apparently Mamdani is not getting that message. He does not look at all of this and say, we need to spend our money more wisely. Instead, he looks at that cavalcade of failures, and he says, we need to spend more and tax more. He laid out his plan to close what is currently a $5.4 billion budget gap. He said to be consistent with his campaigning, his preferred method is to get a 2% income tax hike on anyone making over a million dollars. That would push the combined state and city rate to roughly 16.8%, which would be the highest in the entire United States by a lot. California, the other catastrophe, Their top rate, at least, tops out at 13.3%, which is already ridiculous. Add federal taxes on top, and you're looking at over 53 cents of every dollar going to the government. And that's before sales tax and stuff like that. Now, governor Hochul has repeatedly said to Mamdani and anybody else who would listen, she's not going to do an income tax hike. She won't sign him. She's up for reelection, okay? There's no way she's got an appetite for more taxes. So what is Mamdani's backup plan? It's a 9.5% property tax increase. It's the first one since 2003. It's going to hit over 3 million residential units and a hundred thousand commercial buildings. And this is the same guy who won the election by promising to freeze rents. It was his signature campaign promise, the thing he chanted at rallies. Freeze the rent, remember? And now, less than two months into office, the very first major fiscal lever that he reaches for is one that will almost certainly raise rents for the majority of New York city's renters. Now, because roughly 56% of apartments aren't rent stabilized, and those landlords will pass the cost straight through to tenants, this is going to be a problem for the 44% that are stabilized. Landlords obviously can't raise rent, so they'll cut maintenance, delay repairs, and let buildings just deteriorate. Now, the small property owners of New York said it very plainly. Raising property taxes while freezing rents would be crushing, driving small owners into foreclosure and bankruptcy. I know everybody thinks that all of these buildings are owned by megacorps, but they're not. Mamdani himself admitted that this problem is real. He said this would effectively be a tax on working and middle class New Yorkers. Those are his own words. The man who ran on affordability is now proposing a regressive tax that his own comptroller called, something that's going to hit communities of color harder than wealthy neighborhoods. And he's doing that instead of what? Instead of making budget cuts. All right, there's an even deeper problem. His supporters are going to chant stuff like tax a rich at rallies. But the top 1% of filers already pay 40% of the city's income taxes and they're leaving now. New York City's share of the nation's millionaires has dropped. They used to be, what, 6.5%? They're now 4.2%. That's a drop of 35% just over a decade. More than 125,000 New Yorkers have fled to Florida in the last few years, taking nearly $14 billion in income with them. These people have accountants, boys and girls. They have options. They've got Florida. You know who can't leave though? Normal people. People that own a house, people that own a small business. They are stuck, left there to deal with more taxes.

[Drew]

Nobody owns houses and businesses.

[Tom]

Tom Drew if actually, if that were true, that would be a catastrophe. But alas, they do.

[Drew]

Mom, Daddy's orders.

[Tom]

This is fundamental math that ultimately democratic socialists are going to have to deal with. Margaret Thatcher said it best when she said the problem with socialism is that you eventually run out of people, other people's money. We'll see how this plays out. But when you've got Momdani's entire agenda, free buses at 800 million a year, city owned grocery stores, universal child care, four year rent freeze. All of it was predicated on his ability to tax the rich to pay for it. But the rich are leaving. The governor won't authorize a tax, and the budget still by law has to be balanced. So who pays? The middle class, the working class, the exact people that he promised to protect. This is the game of socialism, boys and girls. So you can call it democratic socialism if you want. It is the same idea. New York does not have a revenue problem. It has a spending problem. And until some mayor somewhere has the courage to say that out loud, to actually cut the waste, reform pensions, renegotiate contracts, and stop treating taxpayers like they are an infinite atm, no amount of taxing will ever be enough. This is why the federal government has deficits of trillions of dollars. There's no point at which your spending can be out of control and you're able to tax people enough, it just doesn't work. You first have to get your spending under control. You have to cut things. And I get that people don't want to do it, but it is the only way forward. You will forever run into the realities of math.

[Drew]

This Is a tough one because the largest driver of the budget is pensions, health care costs.

[Tom]

Yep. Guess what?

[Drew]

You have to cut pensions and health care.

[Tom]

There you go.

[Drew]

You worked at the city, but, sorry, the city can't afford you anymore.

[Tom]

People have got to understand you cannot make everything free. You can't. There are going to be some places that are expensive to live. It just is the way that it is. And if you want a cheaper life, you have to go to a cheaper place. And if then that place finds, oh, like, we're losing people, then they will stop doing moronic policies. And if they really want workers, like, if you're a really wealthy person in New York and you are like, whoa, what do I do? There's nobody here to help me do my laundry, walk my dog, whatever your thing is, well, then you better build more housing. But they're not doing that. They're taking this ridiculous, completely moronic approach, and they're paying the consequences. There are physics to this stuff. Like, you may want to, let's say that you, you make race cars and you're trying to win, and you may want a particular design that looks cool to be the fastest, but aerodynamics are real, and you have to adhere to the realities of physics. Your tires have to be a certain way because road cond. Are a certain way. Aerodynamics work a certain way, Drivers work a certain way. And if you want to build against a theory, that theory is going to make contact with reality at some point. And that's why I say all of this stuff comes back to having a Federal Reserve. When people can print money, when they can do things at a deficit, they don't have to be responsible. At some point, we have to admit you cannot pay for everything. And so if you're going to do a new thing, great. Like, I actually don't. If, if, if New York says we want to offer free housing to everybody who makes less than $75,000, I don't have a philosophical problem with it. Just show me what you're not going to do to pay for that. And if taxpayers are like, yeah, I'm cool with that, great. What the problem? You're saying, hey, my tax base doesn't mind this, so they're happy to fork over. They're not leaving. Cool. This is a thing we all agree as New Yorkers, we want to spend our taxpayer dollars on. Great. It's when you want to do something that is not popular with the people that pay 40% of your tax base. And you. And this is not a communist country, we're not under a dictatorship, so people can and will leave. And by the way, the states compete for population through tax policies. And I do. Are they just blind to that? So it's like you basically compete on weather, safety, education and tax. And that's as a state, you're like, hey, we want to be friendly to business.

[Drew]

Cool.

[Tom]

Hey, we want to be the best place for education so we attract parents. Hey, we want lower taxes, whatever. But like, you're competing on something that people really care about. And it's a very small number of things that people care about enough to pick up their whole family and move.

[Drew]

It seems like this is a common theme with politicians where they get into office promising cuts and benefits for the little guy, and the little guy ends up getting screwed out of the transaction. To your point, rich people could just get up and leave and go somewhere else, or they get tax cuts if you're part of the big beautiful bill. But with New York specifically, if somebody did pay into a pension and pension calls are ballooning to them and say, sorry, we have to cut pensions. That is a slap in the face of the person that paid into it voluntarily. They didn't have it. Same thing with Social Security. You guys took it out of my check this entire time. You told me, I'll get it later. And now the later comes and you're saying, sorry, we don't got it no more.

[Tom]

Yes. And that makes you a. Unless you're just the one cleaning up the mess. You're a. Like, you're the that voted for this stuff, that either was economically illiterate and you thusly had no business whatsoever voting for this. Get out of office, train these people. We talk about like, how do we not teach kids about self esteem and balancing a checkbook and all that stuff in grade school. And yet we let our lawmakers be economically responsible, retarded. It is so crazy, man. It is so crazy. If you want me to vote for you, explain economics to me. If you cannot explain economics, get the out It. It is so wild, man. It is so wild. We do not hold people to the same account that I get held to in a deep dive on YouTube. Like people will come at me for not understanding an economic principle. Hey, God bless you, each and every one. Make me sharper. Hold me to a higher standard. But you'll find elect democratic socialist who is. Is so economically illiterate. It is. It is the version of somebody. This is a real thing that happened. There was a guy who wanted to invent what is now a parachute and he was like, hey, I've invented this thing, it works. And I'm going to go up on the Eiffel Tower and I'm going to jump off and I'm going to show you that it works. And so he goes up and he's got his like sort of wingy suit, parachute thing. He jumps off and dies when he hits the ground. Okay? That's what these guys do. But they're not the ones that hit the ground. They're the ones going, hey, New York, as I live in a lavish palace with guards and fences and I've got a cool idea, I'm going to put you up on the Eiffel Tower or up on the Empire State Building since we're in New York. Don't worry, it'll catch you on the way down. Jump. And they just die. One after another, one after another, one after another. And nobody wants to go, hey, dip. It doesn't work. There are physics and I just, it is, it is absolutely maddening that we cannot get people to go, I need to sit down, I need to map out these physics. Because there's like a real thing at play here. But they don't, they are politically minded people and they are. And listen, I made a big mistake when I got into game development and I said, I'm going to deliver a AAA game and I'm going to do it in pieces so that the community can be with me. And I'm going to be this genius marketer who uses the building of his game as a way to get players invested in this thing. So by the time it's ready, it's going to be amazing. And what are all these fools doing that like go underground for seven years and then fingers crossed, hope and pray. And then I was met with the physics of game development. It and I realized, oh, the art is the most expensive part of the game. A lot of your ideas are going to be terrible and you won't know that until you put them in the game. So you actually want to do the exact opposite of what I'm doing. You want to wireframe, make it ugly, just get it in lightweight, see if it's actually fun to play and then you can make things pretty at the very end. So I encountered the raw reality of how many pixels can be pushed by a designer, how many pixels can be rendered by a gpu. And I had to adjust. These guys don't adjust. They have so much history looking back to say this doesn't work and yet they do it anyway. It's Maddening we're hitting pause for a moment, but there's plenty more ahead, so don't go anywhere.

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[Tom]

Thanks for sticking around. Let's get right back into the action. Drew Are we about to enter World War iii? That's the question on everybody's lips.

[Drew]

This is interesting, but yeah, ground us. Let us know what's going on.

[Tom]

This has the potential to escalate very quickly as US And Iranian diplomats are working towards a negotiated nuclear deal in Geneva. Chinese, Russian and US Warships are building up off the coast of Iran and pointing guns at each other. The United States just assembled its largest military buildup in the Middle east since Operation Midnight Hammer last June when we dropped a whole bunch of really big bombs on the Iranian nuclear facilities. We've got the USS Abraham Lincoln Carrier Strike Group carrying roughly 90 aircraft, including F35s. The USS Gerald R. Ford, the largest and most expensive warship ever built, is en route to join. That gives us a rare dual carrier Presence. We've got six plus destroyers in the surrounding waters, three mine clearing warships, 35 plus F15E Strike Eagles in Jordan, additional F35s and F22s all across the Gulf Thaad and Patriot missile defense batteries, and over 150 cargo flights of weapons and equipment. That's a lot. Trump's message is never subtle, and it's certainly not subtle this time. He posted on True Social this is a quote, by the way. A massive armada is heading towards Iran. It is ready, willing and able to rapidly fulfill its mission with speed and violence if necessary. He reminded Iran that last June the US Launched what he called Operation Midnight Hammer, which was a major destruction of Iran, in Trump's words. And then he said the next attack will be far worse. Trump has said many times that Iran is not getting nuclear weapons. Full stop, period. End of story. So now he is negotiating with a hammer in his hand. You've got not an alliance with Russia and China, but boy, do you have a growing relationship with them. We'll see how far it goes. Iran is not exactly going to be forced to back down in the way that they might have been historically, when you've got China and Russia trying to establish themselves as a player on the global seas, which they have admitted openly. And that is why I say things could escalate very quickly. On the exact same day that negotiations resumed in Geneva, Iran's Revolutionary Guard launched a live fire naval drill called Smart Control of the Strait of Hormuz. And it partially closed the strait itself for what they called security precautions. Iran's supreme leader Khomeini, speaking while the talks were literally underway, said, this is yes, a paraphrase, but boy is it close to exactly what he said. A warship is dangerous, but even more dangerous is the weapon that can sink it. As Drew was pointing out, talking a very big game. The IRGC already tried to seize a U.S. tanker in early February. Six gunboats attempted to stop the Stena Imperative before the USS McFowell escorted it back to safety. An F35 shot down an Iranian drone approaching the Abraham Lincoln. Iran has seized two other foreign oil tankers near Farsi Island. And an IRGC commander described Iran's islands in the Persian Gulf as basically impregnable fortresses and unsinkable aircraft carriers, basically saying like, hey, you may think that you have the advantage by bringing all this hardware, but we have things that you can't even sink. We've got two opposing forces staring each other down, heavily armed and in a very narrow space. It's unclear how far Russia and China are willing to go to back up Iran, so I won't over dramatize that. But it is incredibly telling that they're using this moment to make a move, despite the unknown veracity of how far they're going to go. But they are clearly trying to send a message. Russia and China have been running joint naval exercises with Iran since 2019. But the time timing here is obviously meant to be a signal. It's meant to send a message to the US and officially stated agenda of Russia is to now start to participate in terms of who's going to patrol the oceans. For a long time, the US has been the sole keeper of the world order by having the largest military. You've now got Russia stating that that's part of its aims. China, their foreign minister, warned at the Munich Security conference that just happened that any war involving Iran would destabilize the entire region. The Chinese contingent that's, I suppose, meant to be there to keep the peace includes a guided missile destroyer, a guided missile frigate and a replenishment ship. From their base in Djibouti, Russia Sent the Marshall Shop. This is going to be tough talking about all these Russian names. Marshall. Shaposhnikov. An anti.

[Drew]

Huh.

[Tom]

Rolls off the tongue.

[Drew]

Right?

[Tom]

That's an anti submarine warfare frigate. So you've got the US Carrier strike group, soon to be two. You have American destroyers patrolling the Strait of Hormuz. You have Iranian Revolutionary Guard boats running live fire drills in the same strait part. You have Russians, Chinese warships conducting joint exercises with Iran in those exact same waters. And all of this in a passage that is only 24 miles wide and carries one fifth of the entire planet's oil supply. Where is this all going to go? They're explicitly framing this as a challenge to Western naval dominance. Doesn't mean that they're necessarily going to fight us directly. Nobody wants that. But their presence changes the math of how the US thinks through what we're going to do here. It complicates our decision making and increases the odds that some local commander in a speedboat or a destroyer or whatever makes a split second decision that cascades into something that nobody is ready for. Iran has said it will come back supposedly in a couple of weeks with detailed proposals. Trump says, though, that all options remain on the table. We'll see how this stuff plays out. Some people believe that both sides genuinely want a deal. I'm not so sure. Iran's economy is shattered, and so that does give them the immediate need to at least get the economic sanctions lifted. I think that they want to buy themselves time to go back underground, continue to build up their nuclear program and get back to the business of having a nuclear weapon, because that would change everything. Not just in the region, that would change things in the world. And we really are at risk right now of massive nuclear proliferation as this becomes a multipolar world. We won't have the kind of controls that we've had over people to stop this kind of thing from escalating and so expect it to escalate. You've also got the Epstein files are not going anywhere. Boy, a nice big distraction from that would go a long way in terms of controlling the news cycle. And so I don't have any reason to believe this is actually going to be true other than history that says that leaders, when they are under attack, will leverage things like this as a way to take back control of the narrative to shore up their power. I'm tense about that as, as well. We'll see. We'll see how it plays out. This is from Khomeini.

[Drew]

The US President keeps saying they have the strongest military force in the world, the strongest military force in the world may at times be struck so hard that it cannot get up again. Like, if we're at a party and somebody said that to me, I'm like, yo, like, are we good? Like, like I would change my dimension at that point. You know what I mean?

[Tom]

Like, we know we're not good.

[Drew]

This is not just like a casual thing. And then this is, here's the thing,

[Tom]

these guys, though, they do pop off all the time. They talk crazy to me. They erode their own credibility when they say stuff like this because they're just

[Drew]

backing it up type thing.

[Tom]

This is somebody that's not, not. They're not going to do anything. So they will launch some rockets at Israel, they'll send a drone or two out. But they know if they really uncork that, given that Trump has already shown that he will strike people militarily, they know that this is like poof and you're vaporized. So they have to do something to save face. They have to do enough to keep their people guessing. But if they overplay that card and actually make a move, move, they'll get just battered. I would say internationally, they don't have a good reputation for backing it up. I don't think they have a way to back it up. I don't think Russia and China actually want the smoke. I think that they want to send an early signal that says, hey, we're a player now on the international scene, but if the US Starts launching missiles, they're not going to fire back. It's interesting. I can feel the poll, as a commentator on this stuff is you end up gravitating around just whatever the headline is right now. I think we have to widen this back out and not lose sight of. Nothing has changed for Israel. Israel still sees themselves as the primary anti Iranian figure. So we're not hearing a lot about what the US and Israeli relationship is right now with all of this. But there's actually an interesting 4chan you and I were talking about before we started rolling. Everyone's going to need to strap on their tinfoil hats. We've now got somebody posting on 4chan again, tinfoil hat. No idea if this is real, but in terms of putting together a more complete narrative of what could be happening goes like this person said I posted yesterday with a 36 hour timeline. We are now in the 24 hour window. Look for a significant number of Iranian leadership to be exterminated. The leadership of Iran is made up of a secret council of 22 military and political leaders who meet regularly in a bunker in Tehran. One of their members is a Mossad agent. Needless to say, this group goes first. Israel knows after the last few years, this is the time to end this show. And tactical nukes will take out most of Iran's missile infrastructure in the first strike. Tehran will go in the first wave with a false flag attack set up for Israel to kick things off. Cheers. And then I think it's the same poster follows up with Venezuela was a test for what's happening in Iran. A large part of the Iranian military and leadership will be vaporized. In the opening salvos. Israel will use tactical nukes to take out Iranian missiles and their bases. We are about T minus three days now. The thing in this I find very difficult to believe is that Israel would use tactical nukes. I mean, false flag, whatever. But if that were big enough, then okay, maybe, but it would have to be Iran leading with something nuclear. The first country to use nuclear weapons changes the board. Like Israel would get universally maligned by, I mean every country, except maybe the US like, people would lose their that parts where I'm like, I don't buy it. I don't buy that Israel would use nuclear weapons unless a nuclear strike was brought upon them first. And that seems like I don't think anybody does that to false flag. Take all this with a grain of salt. The part that I extracted out of this that was just a good reminder is that that Israel really does have Mossad agents everywhere. I heard that they had been working at the pager facility for like 10 years to get all that set up. Imagine running a pager business or being a salesperson in a pager business or what for a decade. So that one day maybe they're like, hey, we need to use that. So this was a good reminder that we're all going to get a surface level bit of news. We're all going to talk about the headlines and all of that, but the real story behind the scenes is going to be far more complicated located. We will do well to remember that. Now part of covering something like this is to understand macroeconomics, understand how this stuff is moving, understand where the future might be headed. And then some of it is just building an accurate mental map in the age of persistent high velocity information. How to make sense of the world so that you're not constantly yanked around by headlines that you can stop, see through something and get to, okay, what's really going on here? So anyway, everybody should be building their own mental model of what's happening, it will be complicated and it is extraordinarily dangerous. And for some reason, like, this is not getting a lot of attention. Like, this is building and building and building. And I know I, for one, at first I couldn't understand why Trump was going so hard. But this is over Iran not getting nukes, which I think is a very.

[Drew]

That we just blew up their nuclear facility, so now they rebuild it and

[Tom]

they're like right back at it. So the question becomes, how rapidly can they just spin these things back up? Was the damage total or were there parts that they could get to? Did we get like, is it possible that some of the nuclear facilities stayed online? Is it possible that some of the uranium that was enriched was moved elsewhere? Elsewhere? I remember claims at the time of all of the above. Once you have it figured out now it's just like, remember how we did that? Go do that. Oh, also, by the way, you structure it better because you're a little bit smarter. So, yeah, I have a feeling it's what you have to break is their will to do this. And just destroying the facilities isn't going to be enough. If you work in university maintenance, Grainger considers you an MVP because your playbook ensures your arena is always ready for test. Tip off. And Grainger is your trusted partner, offering the products you need all in one place, from H VAC and plumbing supplies to lighting and more. And all delivered with plenty of time left on the clock. So your team always gets the win. Call 1-800-GRAINGER visit grainger.com or just stop by Grainger for the ones who get it done.